Feb. 10 (Bloomberg) -- Foreclosure filings in the U.S. fell
17 percent in January from a year earlier, the fourth straight
month of declines, as legal scrutiny of lender practices slowed
actions against delinquent homeowners, RealtyTrac Inc. said.

A total of 261,333 U.S. properties received notices of
default, auction or seizure, the Irvine, California-based data
seller said today in a statement. One in every 497 households
got a filing. It was the third consecutive month with fewer than
300,000 filings, following 20 straight months above that mark.

“Unfortunately, this is less a sign of a robust housing
recovery and more a sign that lenders have become bogged down in
reviewing procedures, resubmitting paperwork and formulating
legal arguments related to accusations of improper foreclosure
processing,” James J. Saccacio, RealtyTrac’s chief executive
officer, said in the statement.

All 50 states are investigating the way lenders and loan
servicers handle foreclosures after claims some were marred by
faulty documentation or by “robo-signing,” the mass processing
of paperwork without proper verification. The coordinated probe
began in October after the biggest U.S. banks suspended some
home repossessions to review their procedures. In December,
filings declined 26 percent, the biggest year-over year drop in
RealtyTrac data going back to January 2005.

Foreclosure filings last month rose 1 percent from
December, according to RealtyTrac.

Default notices in January fell 1 percent from December and
27 percent from a year earlier to 75,198, the lowest monthly
total since July 2007. Defaults have declined for 12 straight
months on an annual basis, and sequentially for four months.

State Slowdowns

The slowdown was most evident in states such as Florida,
where courts oversee foreclosures, RealtyTrac said. Those states
had drops in defaults of 2 percent from December and 39 percent
from January 2010. In non-judicial states, they rose less than 1
percent from December and declined 8 percent from a year
earlier.

Auction notices fell 4 percent from the previous month and
13 percent from a year earlier to 108,002, the lowest monthly
total since February 2009, according to RealtyTrac. Auctions
decreased 39 percent in judicial states and 3 percent in other
states.

Banks seized 78,133 homes in January, a 12 percent increase
from December and an 11 percent drop from January 2010. Seizures
fell 16 percent from a year earlier in judicial states and 9
percent in other states.

Nevada had the highest foreclosure filing rate for the 49th
straight month -- one in 93 households, five times the national
average. Home seizures in the state rose 16 percent from
December.

Rise in Seizures

Arizona had the second-highest filing rate, one in 175
households, and a 54 percent increase in home seizures from
December. Filings rose 16 percent from December and fell 25
percent from a year earlier.

California was third at one in 200 households. Seizures in
the most populous U.S. state were up 32 percent from the
previous month. Idaho had the fourth-highest rate, with one in
241 households receiving a foreclosure filing. Utah was fifth at
one in 265.

Michigan, Georgia, Illinois, Florida and Colorado rounded
out the top 10 highest rates.

Five states had more than half of U.S. filings in January,
led by California’s 67,072, which accounted for more than a
quarter of the nation’s total. After hitting a 25-month low in
November, filings there have increased for two straight months.

Florida was second with 21,671 filings, declining for the
fourth straight month to a 42-month low. Michigan, Arizona and
Texas were third through fifth.

Las Vegas had the highest foreclosure rate of any U.S.
metro area with a population of 200,000 or more. Three
California cities -- Modesto, Stockton and Riverside -- were
second through fourth. Reno, Nevada, ranked fifth; Vallejo and
Bakersfield in California were sixth and seventh; Phoenix was
eighth; and Merced and Sacramento in California were ninth and
10th.

Florida cities were absent from the top 20 in January,
after accounting for nine of the top 20 a year earlier,
according to RealtyTrac, which sells data from counties
representing 90 percent of the U.S. population.